China’s War With Hollywood Has a Ticking Clock

According to China Film Bureau chief Zhang Hongsen, the Chinese film industry only has a couple of years to shore up its competitiveness with Hollywood or face the prospect of getting left behind. That’s because in four years, the quota on film imports in China is set to increase once again from the current 34 titles a year to 44 — maybe even more.

The change comes as China is set to honor a memorandum of understanding agreement regarding its current quota system with the World Trade Organization, set in place in 2012 for a term of five years. “This is the year when the battle between Hollywood and China really begins,” said Zhang, a director at the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT), according to The Hollywood Reporter. “Chinese films are encountering serious challenges and 2014 is a crucial year to decide who the winner will be.”

The remainder of 2014 will be important because there’s a chance that the box office for foreign films will exceed the Chinese domestic box office by the end of the year. Last year, the domestic box office narrowly edged out the foreign box office largely on the backs of Chinese star Stephen Chow’s Journey to the West: Conquering the Demons, Donnie Yen’s The Monkey King, and Dad, Where Are We Going?, an adaption of a reality TV series. China recently announced a series of measures aimed at upping the Chinese film industry’s competitiveness with Hollywood and other foreign imports.

But the Chinese domestic box office will have an even tougher time trying to come out ahead this year, as several Hollywood imports have already shown explosive popularity in the region — now the second-largest movie-going population in the world. Bryan Singer’s X-Men: Days of Future Past has earned $116.49 million so far, and there’s talk that Transformers 4: Age of Extinction could break the Chinese box office record currently held by James Cameron’s Avatar,which earned $221.9 million in China.

Age of Extinction has benefitted from extensive marketing in China usually not afforded to Hollywood-based films, which is one reason the film is expected to perform so strongly. The film is an example of Hollywood’s recent push to create hybrid American-Chinese productions in order to fully capitalize on the huge potential of Chinese movie-goers. Age of Extinction features Chinese actors and locations, and will even be edited completely differently for Chinese audiences.

“With the release of Transformers 4: Age of Extinction, domestic film’s market share will fall below 50 percent,” Zhang said, via The Hollywood Reporter. “The Chinese film industry has grown 34.57 percent annually from 1 billion yuan in 2003 ($160 million) to 21.7 billion yuan ($3.48 billion) in 2013 — just 10 years. But this is just the initial stage, not a mature stage and also not a final stage. And at a stage like this, we face serious challenges.”

Zhang has called on Chinese theater owners to limit screening times for Age of Extinction while encouraging them to show Chinese-made films, something that’s sure to further frustrate Hollywood studios — especially when you consider that the Chinese box office is expected to reach nearly $5 billion this year.

“The main point is that we need to defend and fight for our cultural territory,” Zhang said, per The Hollywood Reporter. “On the economic aspect we will have to see if we will be forced to surrender.”